Fostering Commercial Cooperation under the Japan-U.S. Strategic Energy Partnership (JUSEP) to Advance a Free and Open Indo-Pacific

January 27, 2020

The International Trade Administration (ITA) is organizing activities that support U.S. commercial cooperation with Japan in third markets to advance bilateral and regional goals under the Japan-U.S. Strategic Energy Partnership (JUSEP). This activity is driven by the administration’s broader policy objectives in the Indo-Pacific region. President Trump announced the vision of a free and open Indo-Pacific in Da Nang, Vietnam, in November 2017. The United States is advancing the goal of a free and open Indo-Pacific rooted in respect for: sovereignty; free, fair, and reciprocal trade; transparent governance; and private sector-led economic growth.

The unfettered flow of energy supplies is vital to the stability and security that are necessary for economic growth in the region. The U.S. government launched the Asia Enhancing Development and Growth through Energy, or Asia EDGE, initiative on July 30, 2018, as a mechanism for promoting and supporting open, transparent, and rules-based development policies that would ensure such energy security. Asia EDGE is a U.S. whole-of-government effort to grow sustainable and secure energy markets throughout Asia by promoting U.S. exports, mobilizing private sector investment, removing trade barriers, and strengthening standards and procurement practices.

The United States is working with Japan as a like-minded country to advance the goals of a free and open Indo-Pacific and Asia EDGE. The United States and Japan are strong allies and the world’s first and third largest economies, accounting for about 30 percent of global gross domestic product. On October 7, 2019, the United States and Japan signed the U.S.-Japan Trade Agreement, covering new market access for agriculture and certain industrial goods, as well the U.S.-Japan Digital Trade Agreement. The agreements demonstrate the deepening partnership between the United States and Japan, and our mutual commitment to promoting free, fair, and reciprocal trade throughout the Indo-Pacific.

Through JUSEP the United States and Japan have committed to developing energy infrastructure projects in third-countries. It is a multiagency, bilateral engagement that seeks to promote capacity building, project development, and project financing in several regions, including Southeast and South Asia. Commercial cooperation under JUSEP will strengthen joint strategic efforts in the region and enhance U.S. and Japanese private sector competitiveness by making U.S. and Japanese government resources available to them.

ITA, in cooperation with Japan’s Ministry of Economy, Trade, and Industry (METI), has organized several events that bring the U.S. and Japanese private sectors together to inform them of the tools the governments jointly offer and to help facilitate partnerships between U.S. and Japanese companies pursuing regional energy projects. These events have included the following:

2018 December U.S.-Japan Cooperation on Energy Infrastructure Development in Vietnam Workshop in Ho Chi Minh City: A half-day bilateral workshop that included panel discussions on financing tools, private sector presentations, and a roundtable discussion on opportunities and challenges in Vietnam’s energy sector.

2019 March JakartaIndonesia-U.S.-Japan LNG Workshop: A trilateral workshop organized with panel discussions held on LNG Business Opportunities in Indonesia, U.S. and Japan Overseas Energy Strategy, Procurement, Gas Distribution, Regional Electrification, and Financing.

2019 October Singapore Workshop on JUSEP Financing: A workshop discussion that included public and private financing of infrastructure projects.

Pictured: Attendees of the August JUSEP meeting in Bangkok.

These events have been supplemented by several others that bring the private sector into contact with government agencies involved in training or financing efforts in the region. These agencies include the Japan Oil, Gas and Metals National Corporation (JOGMEC), Japan Bank for International Cooperation (JBIC), and Nippon Export and Investment Insurance (NEXI).

U.S. government agencies and Japanese counterparts are also working to develop the policies and mechanisms to implement JUSEP and organizing specific programs to deliver on these commitments. For example:

In August 2019, the United States and Japan announced the Japan-U.S. Mekong Power Partnership (JUMPP), to which the United States government committed an initial $29.5 million under Asia EDGE to promote economic growth and enhanced electricity interconnections among the countries in the Mekong region through free, open, stable and rules-based regional electricity markets.

In September 2019, Japan announced intentions to increase its public and private financing for JUSEP activities by another $10 billion. The funding will be utilized to enhance capacity building trainings, which will further promote joint and collaborative activities between the United States and Japan by facilitating financing for projects to supply LNG or build LNG infrastructure in the Indo-Pacific region. This Japanese public finance facility includes support from JOGMEC, JBIC, and NEXI.

In 2020, ITA and METI, with the support and involvement of other federal government agencies, plan to continue this program of events that will further promote the goals of JUSEP, which will enhance export opportunities for U.S. companies in the energy sector.